Correlation Between United States and EBay
Can any of the company-specific risk be diversified away by investing in both United States and EBay at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining United States and EBay into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United States Steel and eBay Inc, you can compare the effects of market volatilities on United States and EBay and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in United States with a short position of EBay. Check out your portfolio center. Please also check ongoing floating volatility patterns of United States and EBay.
Diversification Opportunities for United States and EBay
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between United and EBay is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding United States Steel and eBay Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on eBay Inc and United States is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on United States Steel are associated (or correlated) with EBay. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of eBay Inc has no effect on the direction of United States i.e., United States and EBay go up and down completely randomly.
Pair Corralation between United States and EBay
If you would invest 69,298 in United States Steel on September 5, 2024 and sell it today you would earn a total of 7,702 from holding United States Steel or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 0.79% |
| Values | Daily Returns |
United States Steel vs. eBay Inc
Performance |
| Timeline |
| United States Steel |
| eBay Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
United States and EBay Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United States and EBay
The main advantage of trading using opposite United States and EBay positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United States position performs unexpectedly, EBay can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in EBay will offset losses from the drop in EBay's long position.| United States vs. Grupo Simec SAB | United States vs. Industrias CH S | United States vs. Companhia Siderrgica Nacional |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Money Managers module to screen money managers from public funds and ETFs managed around the world.
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